To Kyu-operate or not to Kyu-operate depends a lot on how the GM writes him - some people make Kyubey a nicer incubators than others (or rather, less manipulative), and it could very well be that our way of collecting grief becomes a win win situation. However, at its emotionless little heart, Kyubey only wants one thing, and if we threaten his plans (let's say if our grief can't be used by him and we start making less people witch out) he'll most likely try to stop us (just look at what he told Kyouko in episode 9 to get her out of the way). And even if it's somehow possible that we can collect grief and give it to him, if he doesn't make as much energy from our way (which, I'm assuming our way means that Madoka won't witch out) then he'll try to stop us.
The best case scenario is that no one witches out and Kyubey keeps up his quota, which may give us an advantage as we could use him as a look out and perhaps as an obstacle for Oriko or anyone else.
The worst case scenario is that we can't give collected grief to Kyubey, and so he sees us as an obsiticle and starts helping Oriko and/or other enemies to eliminate us.
All in all, we're going to have to face him sooner or later, but I don't think we should offer to help as there's a chance of the worst case scenario and perhaps even experiments (think Rebellion) if we prove too usesful. Though we also shouldn't act hostile to him unless he tries to pull something - if he find out we're actively screwing with his plan, he'll prove to be a massive pain in the arse later.